Metinvest steel product prices show mixed dynamics

Ukraine FOB prices for the types of steel products
exported by Metinvest (METINV), Ukraine’s largest producer, showed mixed
dynamics during Apr. 3-10, according to Metal Expert, an industry consultancy.

 

Billet prices rose 5% w/w to USD 340/t on Apr. 10, 3%
below their 2019 low of USD 350/t on Oct. 4. Metal Expert emphasized that this
billet price increase, attributed to a spike in scrap prices in Turkey, might
be only a temporary respite within a longer downward trend.

 

HRC prices dropped 5% w/w to USD 363/t on Apr. 10, 1%
below their 2019 low of USD 365/t on Oct. 25.

 

Metal Expert did not provide a price assessment for
slabs for Apr. 10. Slab prices were at USD 320/t on Apr. 3, 4% below their 2019
low of USD 335/t on Nov. 1.

 

Metal Expert’s pig iron prices (FOB Black Sea for a
group of countries that includes Ukraine) plunged 11% w/w to USD 268/t on Apr.
10, 6% below their 2019 low of USD 285/t on Nov. 1.

 

The prices provided by Metal Expert are sophisticated
estimates but they are not necessarily the same as the prices realized by
Metinvest for its specific products.

 

Dmytro Khoroshun: As a result
of this most recent fall in HRC and pig iron prices, the March-April depression
in iron and steel prices has reached the magnitude of their slump in
October-November 2019.

 

Recall, following that slump, EBITDA of Metinvest’s
metallurgical segment plunged to negative USD 36 mln in November
and negative USD 85 mln in December.
Metinvest’s metallurgical segment losses resulted in its total EBITDA turning
negative for each of those two months. Because of the March-April price
depression, we expect Metinvest’s profitability to suffer similarly in
May-June.

 

We maintain our negative view on METINV bonds.